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Finance Ministry introduces draft budget

The Finance Ministry finally submitted a draft of the state budget for 2017 and the general government budget for years 2017-2019, meeting its obligation, as the deadline for doing so was August 15.

“The [draft] budget pursues fiscal goals, deficits, that were set in the Stability Programme for the coming years,” Finance Minister Peter Kažimír said on August 15 as cited by the TASR newswire.

This is the first draft of the budget while the ambition would be to garner necessary agreements within the ruling coalition by October 15. This is the deadline until which the cabinet should approve the document and send it to parliament for approval.

State budget and general government budgets

The draft is based on a macro-economic prognosis counting on accelerating economic growth from 3.2 percent in 2016 to 3.7 percent in 2017, 4.1 percent in 2018 and 4.6 percent in 2019.

Total revenues of the state budget for 2017 are projected at €14.399 billion while expenditures should be €16.825 billion. The deficit thus should amount to €2.426 billion.

The target deficit of the general government administration is set at 1.29 percent for 2017. In 2018 it should decrease to 0.44 percent and in 2019 Slovakia should achieve a budgetary surplus of 0.16 percent of GDP.

The Finance Ministry further expects in the three-year outlook that the gross debt of the public administration should gradually decrease to 48 percent of GDP in 2019.

The draft already counts on some changes which the government announced in its four-year programme. These include reduction of the corporate tax by one percentage point to 21 percent, scrapping of tax licences as of 2018, and continuation of imposing special taxes and levies on companies operating in regulated branches.

The draft budget also already contains a 6 percent increase in wages of teachers as of September 1, 2016. It also contains expenditures for construction of an industrial park near Nitra where Jaguar Land Rover plans to build its plant, and the Bratislava ring-road D4/R7.

Kažimír added that they would manage to find enough funds also for health care.

“I can assure you that funds for the public health care will be much higher than they were this year,” said Kažimír, ascribing this increase to a favourable development on the labour market and increasing nominal wages.

After the Agriculture Ministry lifted its embargo, it turned out that the companies of Italians suspected of ties with ’Ndrangheta received subsidies worth millions of euros, through the Agricultural Paying Agency.